q1 2018 results - amplifon...2018/02/05 · q1 2018 results i may 2nd, 2018 disclaimer 2 the...
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Q1 2018 ResultsMilan | May 2nd, 2018
Q1 2018 Results I May 2nd, 2018
Disclaimer
2
The information contained herein and other material discussed during the conference call, particularly the ones regarding any
possible or assumed future performance of the Amplifon Group, are or may be forward looking statements and in this respect they
involve some risks and uncertainties.
Any reference to past performance of Amplifon shall not be taken as an indication of future performance.
This document is being provided to you solely for your information and may not be reproduced or redistributed to any other person.
This presentation does not constitute an offer to sell or the solicitation of an offer to buy the securities discussed herein.
IFRS 15 & IFRS 9
From January 1st, 2018 the Group has adopted the principle IFRS 15 "Revenue from contracts with customers" and IFRS 9
"Financial instruments", which have led to changes in accounting policies and in some cases adjustments to the amounts recognized
in the financial statements. The comparative data for 2017 have not been restated, while the data for Q1 2018 data is also presented
without the application of IFRS 15. Thus the comparative analysis in this presentation refers, unless otherwise specified, to 2018
data without the application of IFRS 15, since the impact of IFRS 9 is negligible.
Statement
In compliance with Article 154 bis of the “Uniform Financial Services Act” (Legislative Decree 58/1998), the Financial Reporting
Officer, Gabriele Galli, declares that the accounting information reported in this presentation corresponds to the underlying
documentary reports, books of account and accounting entries.
Q1 2018 Results I May 2nd, 2018 3
Q1 2018 Key takeawaysStrong start to the year
For comparability purpose commentary refers to Q1 2018 prepared without the adoption of IFRS 15 (“@’17 IFRS”) being the impact of IFRS 9 totally irrelevant
▪ Strong top-line growth at +9.7% in LC
▪ Solid organic growth, above market
▪ Robust contribution from M&A
▪ Very challenging comparable basis with the highest growth level reported in 2017 (+16.3% in Q1 2017 vs Q1 2016)
▪ Outpacing the global hearing care retail market
▪ Leadership consolidation and market share gains in all core markets
▪ Continued profitability improvement with EBITDA margin up 40 bps, despite adverse translative FX
▪ Higher marketing investments (~+15% vs Q1 2017)
o Launch of the global hero campaign “New Generation” in core EMEA countries
▪ Ongoing network expansion: 65 shops & 20 SiS
▪ Acquisition of 55 shops & 2 SiS primarily in France, Germany and Canada
o Net cash-out totaled €25 million
▪ Openings of 10 shops & 18 SiS primarily in Spain and Australia
Q1 2018 Results I May 2nd, 2018 4
Q1 2018 Financial highlightsStrong top-line growth and continued profitability expansion
Q1 2018 Q1 2017 Δ%
Data in €m @’18 IFRS @’17 IFRS @’17 IFRS
REVENUES 309.4 310.3 296.1 +4.8%
Organic growth +5.4%
Acquisitions +4.3%
FX -4.9%
EBITDA 43.2 44.0 40.9 +7.7%
Margin % 14.0% 14.2% 13.8% -
▪ Strong top-line growth of +9.7% in LC
▪ Very healthy organic growth at 5.4%
▪ Robust M&A contribution
▪ Significant currency headwind for both USD/EUR and
AUD/EUR
▪ Remarkable Q1 2017 comparable basis, highest growth level
reported in 2017 (+16.3% in Q1 2017 vs Q1 2016)
▪ Continued profitability improvement
▪ EBITDA margin up by 40 bps despite adverse translative FX
▪ Marketing: ~+15%
▪ Net Profit Recurring of €15.2 million, +19.3% vs Q1 2017
▪ Ongoing network expansion with strong M&A in core
countries: Germany, France and Canada
▪ Very strong free cash flow generation
▪ Net debt at €320.1 million, corresponding to 1.43x Net
debt/EBITDA
▪ IFRS 15 marginal impact on revenues and EBITDA
(respectively, -€0.9m and -€0.8m); no cash impact
For comparability purpose commentary refers to Q1 2018 prepared without the adoption of IFRS 15 (“@’17 IFRS”) being the impact of IFRS 9 totally irrelevant
Q1 2018 Results I May 2nd, 2018 5
Revenue roadmap by RegionStrong momentum continues
1 In local currencies
2 Calculated as sum of like-for-like growth and openings
Q1 2018: +11.9% in LC QoQ
EMEA69.8% of Q1 2018 Revenues
APAC13.3% of Q1 2018 Revenues
Q1 2018: +7.6% in LC QoQ
AMERICAS16.7% of Q1 2018 Revenues
Q1 2018: +3.6% in LC QoQ
Q1 2018: +9.7%1
Organic growth2: +5.4%
Acquisitions: +4.3%
FX: -4.9%
Q1 2018 Results I May 2nd, 2018 6
Financial results by Region
▪ Outstanding revenue growth of +11.9% in LC
▪ Strong organic growth
▪ Significant contribution from M&A
▪ Extremely challenging comparable basis (+14.9% in Q1
2017 vs Q1 2016)
▪ Continued double-digit growth in Italy driven by successful
marketing strategy over excellent 2017 results
▪ Very strong performance in Germany fostered by acquisitions
and healthy organic growth
▪ Positive performance in France primarily thanks to M&A
contribution
▪ Outstanding top-line growth for Iberia, driven by double-digit
organic growth and M&A
▪ Strong EBITDA margin improvement of 120bps, after higher
marketing investments (~+20% vs. Q1 2017)
▪ Top-line growth, operational efficiency and scale-reach in
core countries
EMEA: outstanding top-line growth along with profitability expansion
Q1 2018 Q1 2017 Δ%
Data in €m @’18 IFRS @’17 IFRS @’17 IFRS
REVENUES 215.7 216.6 195.2 +11.0%
Organic growth +5.7%
Acquisitions +6.2%
FX -0.9%
EBITDA 30.4 31.2 25.8 +20.9%
Margin % 14.1% 14.4% 13.2% -
For comparability purpose commentary refers to Q1 2018 prepared without the adoption of IFRS 15 (“@’17 IFRS”) being the impact of IFRS 9 totally irrelevant
Q1 2018 Results I May 2nd, 2018 7
Financial results by RegionAMERICAS: solid performance, impacted by adverse FX
▪ Positive top-line growth at +3.6% in LC, despite
exceptional adverse weather conditions in January
▪ Challenging comparable basis (+15.5% in Q1 2017 vs
Q1 2016)
▪ Significant currency headwind
o Average FX at 1.23 in Q1 2018 vs 1.06 in Q1 2017
▪ Strong performance of Miracle-Ear driving the solid
performance for the Region
▪ EBITDA margin improvement of 20bps thanks to
operational excellence
▪ Subsequent to close of Q1 2018, Amplifon disposed
its 51% stake in Direito de Ouvir Amplifon Brasil S/A
to former JV partner
▪ Not the right business model to lead expansion in
South America
▪ Not material financial impact
Q1 2018 Q1 2017 Δ%
Data in €m @’18 IFRS @’17 IFRS @’17 IFRS
REVENUES 51.8 51.9 57.7 -10.0%
Organic growth +2.5%
Acquisitions +1.1%
FX -13.6%
EBITDA 9.0 9.0 9.8 -8.9%
Margin % 17.3% 17.2% 17.0% -
For comparability purpose commentary refers to Q1 2018 prepared without the adoption of IFRS 15 (“@’17 IFRS”) being the impact of IFRS 9 totally irrelevant
Q1 2018 Results I May 2nd, 2018 8
Financial results by RegionAPAC: excellent trading performance
▪ Strong revenue growth of 7.6% in LC
▪ Extremely challenging comparison base (+24.4% in Q1
2017 vs Q1 2016)
▪ Substantial currency headwind
o Average FX at 1.56 in Q1 2018 vs 1.41 in Q1 2017
▪ Robust momentum in Australia, driven by healthy
organic growth
▪ Continued outstanding performance in New Zealand,
driven by high-single digit organic growth
▪ EBITDA at €11.6 million, with margin up 20bps
▪ At Company’s highest profitability levels
Q1 2018 Q1 2017 Δ%
Data in €m @’18 IFRS @’17 IFRS @’17 IFRS
REVENUES 41.3 41.3 42.8 -3.7%
Organic growth +7.6%
Acquisitions 0.0%
FX -11.3%
EBITDA 11.7 11.6 12.0 -3.1%
Margin % 28.3% 28.2% 28.0% -
For comparability purpose commentary refers to Q1 2018 prepared without the adoption of IFRS 15 (“@’17 IFRS”) being the impact of IFRS 9 totally irrelevant
Q1 2018 Results I May 2nd, 2018 9
Q1 2018 Financial resultsDelivering excellent results in all P&L items
Data in €m
(unless specified)
Q1 2018Q1 2017
Δ%
@’17 IFRS@’18 IFRS @’17 IFRS
REVENUES 309.4 310.3 296.1 +4.8%
EBITDA 43.2 44.0 40.9 +7.7%
Margin % 14.0% 14.2% 13.8% -
D&A (16.7) (16.7) (14.9) +12.2%
EBIT 26.5 27.3 26.0 +5.1%
Margin % 8.6% 8.8% 8.8% -
NET FINANCIAL EXPENSES (4.7) (4.7) (4.7) +0.9%
PROFIT BEFORE TAX 21.8 22.6 21.3 +6.1%
Margin % 7.1% 7.3% 7.2% -
TAXES (7.3) (7.4) (8.5) -12.9%
% on PBT 33.3% 32.8% 39.9% -
MINORITY (0.0) (0.0) 0.0 -
NET PROFIT 14.6 15.2 12.8 +19.3%
Margin % 4.7% 4.9% 4.3% -
EPS (Euro) 0.067 0.070 0.058 +19.3%
No non-recurring items in Q1 2018 and Q1 2017
Q1 2018 Results I May 2nd, 2018 10
Q1 2018 Financial resultsStrong operating cash flow to support Capex and M&A to foster Company’s growth
Net financial position (opening date) (296.3) (224.4) (71.8)
Change in net financial position (22.6) (55.0) 32.4
Effect of FX on financial position (1.2) 0.4 (1.6)
Net financial position (closing date) (320.1) (279.0) (41.1)
Data in €m Q1 20181 Q1 2017 Δ
Operating cash flow (a) 19.0 14.9 4.1
Capex (net) (b) (10.6) (12.8) 2.2
Free cash flow (a+b) 8.4 2.1 6.3
Acquisitions (net) (c) (25.0) (50.3) 25.3
Cash provided by (used in) operating and investing activities (16.6) (48.2) 31.6
Cash flow provided by (used in) investing activities (b+c) (35.6) (63.1) 27.5
Cash provided by (used) financing activities (6.0) (6.8) 0.8
Net cash flow for the period (22.6) (55.0) 32.4
No non-recurring items in Q1 2018 and Q1 2017
1. No impact on Cash Flow from 2018 IFRS
Q1 2018 Results I May 2nd, 2018 11
Q1 2018 Financial resultsSolid capital structure to sustain future growth opportunities
1. Short-term debt includes Bond expiring in July 2018. Amplifon has already refinanced the outstanding Bond via new Bank and Revolving Credit
facilities, securing better terms and conditions
2. Change in Equity as at 31/03/2018 @’18 IFRS vs as at 31/12/2017 is primarily due to: IFRS impact (€45.3m) and FX (€16.2m)
Data in €m
31/03/2018 31/12/2017
@’18 IFRS @’17 IFRS
Cash (101.3) (101.3) (124.1)
Short-term debt1 301.5 301.5 301.1
Medium/long-term debt 119.9 119.9 119.3
Net debt 320.1 320.1 296.3
Equity2 536.5 580.8 588.4
Net debt/EBITDA 1.44x 1.43x 1.35x
Net debt/total equity 0.60x 0.55x 0.50x
Q1 2018 Results I May 2nd, 2018 12
2018 Outlook
▪ Overall positive market outlook
▪ Drivers: increasing volumes with stable ASP
▪ Positive sales momentum, above market reference
▪ Contribution from all Regions
▪ Solid organic growth
▪ Contribution from acquisitions
▪ Profitability expansion
▪ Operating leverage and efficiencies to balance higher investments
▪ Moving fast forward in the execution of our 2020 strategic plan
▪ Outpace the market through the launch of Amplifon product-lines & innovative multi-channel eco-system
▪ Roll-out in Italy in Q2 2018
▪ Continue lead consolidation in core markets
▪ Continue re-investing heavily in the business (Marketing, Network expansion, Corporate, People) for long-term
sustainable growth
Entering 2018 with sound optimism
Q1 2018 Results I May 2nd, 2018
Launch of the new Amplifon Product Line and
Multi-channel Ecosystem in the Italian market
13
Valencia, April 14th-16th
>1,600 attendees
3-day convention,
including training
ELISA GUIDOTTI
Stagiaire
Tel: +39 02 5747 2414
OLGA LEPECHKINA
Assistant
Tel: +39 02 5747 2542
FRANCESCA RAMBAUDI
Director
Tel: +39 02 5747 2261
PAOLA BEZZI
Junior specialist
Tel: +39 02 5747 2310
Investor Relations Contacts